Tata Steel LTD. Represented Thro Its Company Secretary And Chief Legal Officer, Mr. K. Parvatheesam vs. The State Of Jharkhand, Through Its Secretary, Department Of Mines And Geology

Facts

Tata Steel Limited (Petitioner) sought transit permits for transporting middlings (coal by-products) from its colliery to its captive power generation plants, Unit #4 (Tata Power) and Unit #5 (Industrial Energy), for its own electricity needs. The District Mining Officer (DMO), Ramgarh (Respondent No. 3), objected, questioning if this constituted 'captive consumption' as defined under the MMDR Act, and directed the Petitioner to comply with Schedule-VI for payment of an 'Additional Amount' treating the stock transfer as a 'sale'. The Petitioner clarified it was a tolling arrangement where 100% of the generated electricity was transmitted back for its captive use. Despite these clarifications, transit permits were not approved, leading to an accumulation of middlings and potential disruption to mining operations. The Petitioner eventually provided an undertaking to pay the 'Additional Amount' if finally held liable. The Revisional Authority dismissed the Petitioner's revision application.

Held

The Jharkhand High Court, in its order dated 11th September 2025, quashed and set aside the orders passed by the District Mining Officer (DMO), Ramgarh, as reflected in the JIMMS Portal, and the order of the Revisional Authority dated 23.07.2025. The Court noted that the issue of whether the transportation of middlings constituted captive consumption was disputed and required adjudication based on the lease deed between Tata Steel Limited and the State. In the absence of the lease deed being presented, the Court found it could not adjudicate the lis under Article 226 of the Constitution. Due to the disputed factual aspects and a concession from the parties, the matter was relegated to the Secretary, Mines and Geology, Government of Jharkhand, for a fresh determination. The Court directed the Secretary to ascertain the facts after parties submit relevant documents. As an interim arrangement, the DMO was directed to issue transport challans subject to the Petitioner paying 50% of the total assessed additional amount and furnishing a bank guarantee for the remaining 50%, pending finalization of the lis. The Court expressly left undecided the ultimate determination of the captive consumption issue, which is now for the Secretary to decide.

Key Issues

1. Whether the transportation of middlings/coal by-products to the Petitioner's captive power generation plants (Unit #4 and Unit #5) for generating electricity for the Petitioner's captive use attracts liability for an additional amount under Section 8(5) of the MMDR Act, 1957. Petitioner's arguments: The Petitioner contended that the arrangement was a tolling arrangement where the middlings were used to generate electricity exclusively for its captive consumption. They argued that the definition of 'use for captive purposes' in the MMDR Act, particularly concerning 'use of entire quantity of mineral extracted from the mining lease in a manufacturing unit owned by the lessee,' was not applicable to coal (Part-A mineral) and was related to transfer of concessions, not the current transaction. They asserted that the electricity generated was effectively used by and for the Petitioner. Revenue/State's arguments: The Respondents, through the DMO, argued that the 'captive consumption' definition required the mineral to be used in a manufacturing unit owned by the lessee. Since Unit #4 was owned by Tata Power Company Limited and Unit #5 by Industrial Energy Limited, and not by the Petitioner (Tata Steel Limited), it did not qualify as captive consumption. They sought to treat the stock transfer as a sale and demanded payment of the additional amount under Schedule-VI of the MMDR Act.